End of preview

This is an unformatted preview. Sign up to view the full document

End of preview

In the automobile industry a great proportion of income comes from selling automobiles Globalization is the inclination of world investment and business to move from a country and local markets to a worldwide environment is a major factor that affects the auto market More than ever it has been easy for foreign auto dealers to enter the American market creating competition Competition is a major factor that takes a toll on the auto industry In America the car making market is driven by whats known as the Big Three Investopediacom says The profits and losses of the big 3 are thought to be an indicator of the overall US economy General Motors - produces Chevrolet Pontiac Oldsmobile Buick and Cadillac Daimler Chrysler - Chrysler Mercedes Jeep and Dodge Ford Motor Co - Ford Lincoln Volvo and Jaguar However Two of the biggest foreign car manufacturers are Toyota Motor Co Honda Motor Co Mr Michael E Porter identified 5 competitive aspects that shape all industries in his book called Techniques for Analyzing Industries and Competitors The below 5 forces by Porter show the relationship between the various competitive forces Porters 5 Forces Analysis 1Threat of New Entrants- It was thought that the American automobile industry and the Big Three were safe But this was not true when Honda Motor Co opened its first office in Ohio The expansion of foreign competitors began to decrease the market of American companies Some factors that decrease foreign cars from becoming a threat are loyalty to American made cars and the cost it would take to replace damaged parts that are manufactured in foreign countries 2 Power of Suppliers - A lot of suppliers depend on a certain automaker to buy a majority of their products If an automaker decided to change suppliers it could be the end of the suppliers business Consequently suppliers have little power 3 Power of Buyers

@Kibin is a lifesaver for my essay right now!!

- Sandra Slivka, student @ UC Berkeley

Wow, this is the best essay help I've ever received!

- Camvu Pham, student @ U of M

If I'd known about @Kibin in college, I would have gotten much more sleep